India’s Development Problem

 

No nation on Earth has the potential of the Republic of India. With a vast population of over a billion people, rivers crisscrossing the subcontinent, a burgeoning STEM field, and a history of thousands of years, it seems that India is destined for greatness in the future. Yet, India also faces major problems. Tuberculosis poses a major public health problem, and despite huge progress, open defecation remains present in India’s countryside. Vast numbers of people live in urban slums – facing unsanitary living conditions, poor schools, and lack of quality infrastructure. While India’s growth will almost certainly continue due to the large population, the nation as a whole must brace to escape the Middle Income Trap – a trap wrought by the lack of diversification from cheaper labor to educated, high-skill labor. In order to do this, India must undergo a massive development program – one which vastly improves infrastructure, housing, medical facilities, and access to schooling across the nation. In order for India to become a first world nation, it must have first-world facilities.

 

Industrialization and development can occur via two methods – either private incentives encourage the development of industry, as seen in the Western World  – or the power of the state forces industrial development, as seen in the Soviet Union.

 

The first option may be unreliable, given the competition that India will face. Private investors have many choices when it comes to industrial nations to produce products. High-tech, high-value products can be produced in highly automated and large American factories. Most other devices can be produced in China. Cheap products – clothes, for instance, can be manufactured in sweatshops in Bangladesh or Vietnam. India will not be able to compete with China or the United States, as there is no point for an investor to build a factory in India when he can simply utilize an already-existing factory in China or the United States. The private sector would dictate that India would become a nation of sweatshops, producing clothes for westerners. This is not ideal. India, with its massive labor-pool and talent-base, must industrialize to a high degree.

 

At the same time, using the hard power of the state to force industrialization has historically produced mixed results. The Soviet Five Year plan and China’s Great Leap Forward killed millions of the people. In the case of the former, centrally-planned industrialization allowed for a victory against Nazi Germany. In the case of the latter, China was arguably set back by several years – it took Deng Xiaoping’s opening of the Chinese economy to instigate true, productive industrialization.

 

India’s greatest potential advantage is the low debt to GDP ratio of 47%. This gives the Indian government resources to undergo heavy industrialization. The overall goal must be to build profitable industrial areas, located near international trade routes, utilizing the most recent technology and built large enough to employ a large labor-force of both skilled and unskilled workers. In order to do this, the government must pair its own funding with the visions of the hungry and ambitious Indian entrepreneurial class.

 

What products does India need? The future of the planet will depend on automation, access to space, access to energy, and access to affordable housing. Factories that produce industrial robots, capable of being used in other factories, would perhaps be the greatest kickstarter for industrial development. If industrial growth is the derivative of a national economy, being able to bolster industrial growth via automation is adding a second derivative, increasing overall growth in the long term. Factories producing pre-fabricated tower units – such as China’s 57-story skyscraper constructed in nineteen days  – have the potential to alleviate India’s slum problems and provide the office spaces for an educated upper-class. Factories mass-producing rocket boosters would allow for India to increase her presence in outer space, potentially to the point of mineral extraction of other worlds. These are all incredibly advantageous developments for the nation with the single greatest potential for growth on Earth.

 

In particular, Indian development must provide for heavy industry first, rather than light, consumer-good industry. Consumer industry cannot build a nation, but heavy industry is fully capable of building a nation. One cannot build a consumer-good factory without steel, which must be provided by a steel mill. Furthermore, heavy industry provides for more jobs when compared to consumer industry.

 

The future of India will likely play a critical role in shaping the future of Earth. The Indian government must ensure that India’s future is strong and industrial, not poor and underdeveloped. The government must not be afraid to spend money in order to build a heavy industrial base. The government must be active in partnering with ambitious and intelligent entrepreneurs, who have ideas for the 21st century. The government must temporarily ignore the whims of foreign investors, and instead, use India’s labor pool to build India. If this occurs, the future of India will be bright.

 

 

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